Mineral Rights and Selling Them
28th March 2011
Mineral rights can be described as the unseen value associated with a tract of land. Historically, land was transferred among owners with the royalty rights co-mingled with the surface rights. As oil and gas production began in the U.S., these rights started to be viewed independently. If mineral rights are severed, i.e. the process of separating mineral rights from the surface rights, a new and separate chain of title for the minerals begins.
Separate ownership of mineral rights and surface rights can sometimes cause confusion. With respect to oil and gas production, the owner of the surface rights has limited input as to whether oil or gas is produced from underneath his property. If production is established, a portion of the value is paid via a royalty fraction (i.e. percentage) to the mineral rights owner.
Of course also, the property owner can sell his or her mineral rights for a great profit. This is another option for a property owner with this on their property. They can keep a value in it or sell all of the rights. It’s a good position to be in.
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